Express Scripts Sues Walgreen over medicare patients

Express Scripts Inc. (ESRX) sued Walgreen Co. (WAG) for what it called a “campaign to disparage” the pharmacy- benefits manager in an illegal attempt to wrest away customers.Walgreen, the biggest U.S. drugstore chain, is using false advertising to encourage Medicare patients to leave Express Scripts in violation of a contract that expires Dec. 31, St. Louis-based Express Scripts said in a Sept. 7 complaint filed in federal court in Chicago. Express Scripts said it will suffer “irreparable damage” unless the court issues an injunction stopping Walgreen’s action.Walgreen, of Deerfield, Illinois, said in June that it will not participate in Express Scripts’s pharmacy network next year because negotiations had collapsed on renewing the contract worth more than $5 billion in annual drug sales. A website sponsored by Walgreen says Medicare recipients who remain with Express Scripts won’t be able to fill Part D prescriptions after Dec. 31.“This is false and highly misleading because nothing will prohibit Walgreen from continuing to fill valid prescriptions for such members after Dec. 31, 2011, even if Walgreen is not a part of Express Scripts’ pharmacy network,” Express Scripts said in the complaint.“Walgreen has crossed a line and is not negotiating in good faith,” Express Scripts spokesman Brian Henry said yesterday in an e-mail. “We will not let this stand.”Walgreen has asked the court to stay the proceedings, saying in a Sept. 12 motion that Express Scripts brought its claims in the wrong forum because the contract requires the parties to resolve such disputes through binding arbitration.“We think that it is important to inform our patients and the public how this may impact their ability to fill prescriptions at Walgreen next year if Express Scripts serves as the pharmacy-benefit manager for their particular health care plans, and we regret that Express Scripts has resorted to litigation in an effort to stop us,” Michael Polzin, a spokesman for Walgreen, said yesterday in an e-mail. “We obviously intend to vigorously defend against their suit.”Pharmacy benefits managers act as middlemen among drugmakers, pharmacies and health-plan sponsors to negotiate prices and manage the use of drugs by patients. Express Scripts agreed in July to buy rival Medco Health Solutions Inc. (MHS) to create the biggest pharmacy benefits manager in the U.S. The deal requires clearance from antitrust regulators.